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After launching a multifelt trade war, the Trump administration has removed smartphones and other consumer electronics from “mutual” tariffs that will greatly boost large engineers as the White House fights to calm global markets.
According to a notification posted late Friday night by the Customs Border Patrol, smartphones, along with routers, chip-making equipment, certain computers and laptops, will be exempt from mutual tariffs, including the 125% collection Donald Trump imposed on Chinese imports.
The carve-out is a major victory for companies like Apple, Nvidia and Microsoft, following a week of intense turbulence in the US market after Trump unleashed the trade war on “liberation day” on April 2nd.
The exemption was the first sign of Trump’s tariff softening against China, and he ratcheted over the past week, even if he suspends the steepest “mutual” tariffs. He held 10% tariffs on most trading partners.
The Trump administration has already exempt several sectors from mutual tariffs, including semiconductors and drugs, but the president has shown that he is still planning to apply tariffs to those sectors.
White House officials said on Saturday that the US will launch another probe that could lead to chip tariffs “soon.”
As the supply chain is largely centered around China, the distribution of smartphones and computers is especially welcome to Apple. Analysts estimate that, despite Tech Group’s efforts to diversify production into India in recent years, around 80% of iPhones are still made domestically.
The majority of the iPhone is built in a large factory complex in Zhengzhou, run by Apple’s manufacturing partner Foxconn. Factory workers told the Financial Times this week that the operation was normal but they were worried about the impact of the trade war.
The stocks of the US tech giant were one of Wall Street’s biggest casualties in the era shortly after Trump announced mutual tariffs. Over the course of a few days, roughly $700 million has been wiped out of Apple’s market value.
Earlier this week, Trump said he would consider excluding US businesses from his tariffs, but added that such a decision would be made “instinctively.”
Chad Bown, a senior fellow at Peterson Institute for International Economics, said the exemption reflects smartphone and appliance exceptions issued by Trump during the 2018 and 2019 trade wars.
“We need to see if we’ll stick to this exemption as well, or if the president will turn the course back again in the not too distant future,” Bown says.
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US Customs and Border Protection introduced inquiries regarding the order to the US International Trade Commission.
The White House has confirmed that the new exemption will not apply to a 20% tariff on all Chinese imports that Trump has applied to address China’s role in fentanyl production.
White House spokesman Karoline Leavitt said on Saturday that companies, including Apple, TSMC and Nvidia, are “hustling to oversee manufacturing in the US as soon as possible.”
“President Trump has made it clear that the US cannot rely on China to manufacture important technologies such as semiconductors, chips, smartphones and laptops,” Leavitt said.
Apple declined to comment.
Economists warn that the drastic nature of Trump’s tariffs, which apply to widespread US consumer goods, is driving US inflation and threatening to be hit by economic growth.
New York Fed chief John Williams said US inflation could reach 4% as a result of Trump’s tariffs.
Additional Reports by Michael Acton of San Francisco
